Somali Pirates Take Their Biggest Prize Yet

It's a scene out of another century. On Tuesday night an Indian Navy vessel in the Gulf of Aden approached a ship thought to be manned by pirates operating from lawless Somalia. Although it was dark, Indian officers told news-agency reporters that they could see crew members on deck brandishing guns and rocket-propelled grenade launchers. Volleys were fired, fire broke out on one of the pirate ships, and it sank. The crew escaped in a speed boat, the Navy ship in hot pursuit.

Banks and automakers might be in a tailspin, but piracy is one industry that's still thriving. So far this year, pirates operating off the coast of Somalia have successfully hijacked 36 vessels. Navies from around the world have descended on the troubled waters around the Horn of Africa to try to restore order, but they seem only to have emboldened the pirates. Last weekend they took their most audacious prize yet: the Sirius Star, a Saudi supertanker carrying $100 million worth of oil. It remains moored in plain view off the Somali coast as the owners, Vela International, a subsidiary of Aramco, await ransom demands. NEWSWEEK's Barrett Sheridan spoke with Peter Lehr, a lecturer in terrorism studies at Scotland's University of St. Andrews and an expert on Indian Ocean piracy, about the fate of the Sirius Star and Somalia's darkened waters. Excerpts:

What will happen next to the Sirius Star?
The pirates will start negotiations with a demand for an outrageously high amount of money. If you take a look at the MV Faina [a hijacked Ukrainian ship carrying 33 Soviet-made tanks], the pirates originally demanded $35 million. That was at the end of September, and they're now down to $8 million, which is still quite a hefty amount for such a ship—the usual ransom amount is $2 million. For the Sirius Star I think they will try to get as much out of it as possible. However, the ship is quite dangerous for them. It's far too big. Navigational errors could happen, and you could have a disastrous oil spill damaging the whole coast of Somalia with the 2 million barrels aboard. I'm not really sure that the pirates were well advised to attack such a huge ship.

So they may be eager to have it taken off their hands.
Yes, could be. It was a very audacious raid—450 nautical miles off the coast of Kenya! That's amazing. So they will start by demanding, say, $50 million or something like that. Negotiations will take probably weeks, I think. The MV Faina has been in the hands of pirates since the end of September. That's now seven weeks. So it can be a protracted affair.

And how do these negotiations work? Who's doing the negotiating?
You first establish a link with the pirates, and then you have some go-betweens to ensure that the money will flow. It's a difficult procedure. They never meet in person. If the money is handed over, it's usually by an ex-military member, usually someone from Special Forces. Or it's paid into an offshore bank, although many banks don't like to touch this money anymore. It's now too high-profile, too hot. In recent cases, the money was paid in cash—U.S. dollars, usually.

The Sirius Star is a huge ship and can't be hidden. Where do they take the ship?
Most of the hijacked ships are at anchor off the port of Eyl in the Puntland region of Somalia, near the Horn of Africa. They are basically in the public eye—everybody can see the ships there, and they're usually shadowed by warships. The pirates know very well that there is nothing that the warships can do.

Why not?
A ship is a good place to hide crew members. Let's just imagine you do something Steven Seagal would do—you try to take the ship back. You send in Special Forces. You get onboard—that's the easy part. But you have no idea where the pirates are, how many pirates are onboard, and where they're holding the hostages. That means you simply can't be quick enough to guarantee that none of the hostages are killed.

What do the pirates do with their money?
The easy answer is they spend it. You see lots of brand-new pickup trucks and villas spreading all over the port of Eyl. There are brand-new hotels and restaurants catering to the pirates, a whole entertainment industry. There are lots of ways to spend your money—for example, they can also marry [an additional] new wife, which is allowed in Somalia.

So pirate loot has created whole new economies.
Yes. They also invest it in new hardware, like fiberglass boats, weapons and, of course, bribes to officials and militia warlords. It would be quite easy for warlords to take over one of the pirate ports—they have more manpower than the pirates have. And the Islamic movements could clamp down on piracy very hard if they liked. So I think lots of money is flowing into their coffers as well.

In some parts of Somalia, the pirates are treated like local heroes. Why?
Off the coast of Somalia, you will find a lot of high-seas trawlers from different nations conducting illegal fishing operations to the tune of $300 million per year. The vessels that the Somali [fishermen] have are no match for these bigger ships. Somali fishermen started to complain in the mid-1990s that their nets got destroyed, that their boats got rammed and capsized and all that stuff. This is one thing that the fishermen keep in mind when they're talking about pirates—they're fighting back. Many see them as young resistance fighters that are fighting against the Western system and milking it to the best of their capability. Also, the pirates earn quite a lot of money. They've created a boom along several coastal areas, which means they're earning quite a living, basically, for the whole community.

Piracy has picked up a lot this year. What's the impact on the global shipping industry?
If you take a look at the freight rates, you will see that international shipping is one of the victims of this global economic meltdown. Freight rates are falling through the floor, which means shipping is losing a lot of money. Many ships will be retired or put at anchor for a while. [In hijacking cases] you're talking about $2 million per ship—that is quite costly, especially for smaller shipping agencies. They will go bankrupt.

Why don't big tankers have security onboard?
Security guards cost money. That's one explanation. The second is, if you have cargo of a volatile nature, you don't want to have a fire fight onboard. You have, for example, chemical tankers, tankers with aviation fuel, and oil tankers like the Sirius Star. If you're the master of such a ship, you don't want to have people shooting it out onboard.

Some ship operators are considering going around the cape to avoid this territory.
That means roughly 15 days more at sea, which drives up the cost considerably. That's not likely to happen. At the moment the shipping industry is losing quite a lot of money. They simply cannot afford it.

What can be done then?
The best solution would be re-establishing law and order in Somalia, but that's wishful thinking at the moment. The second best option is re-establishing law and order in Somali waters and the Gulf of Aden. NATO and now the European Union have operations there. But the best solution would be a regional effort. In the Gulf of Aden it would be fairly straightforward and easy, because you have Saudi Arabia, which has a formidable Navy and lots of money to spend. It would be more difficult along the coast of East Africa because there you have states like Kenya and Tanzania, which don't have the resources for such operations. They would need Western expertise and maybe secondhand vessels for offshore patrols. But in the end, even though that would be costly, it would be easier and, for many of the coastal states, more acceptable than an ongoing NATO and European Union mission.